AVOID HIGH RMD PENALTIES

Required minimum distribution (RMD) rules are pretty strict. If you don't want to face a hefty fine, you must withdraw a certain amount of money every year from tax-deferred retirement plans like 401(k)s  and traditional IRAs after you reach age 70½.  The withdrawals you make are then taxed as ordinary income. Not following these rules can lead to a penalty equal to 50% of the amount that should have been withdrawn, plus regular tax.

USING RETIREMENT FUNDS TO BUILD A HOME?

If you're considering using funds from your retirement plan to build a home, understand the tax rules. You may use up to $10,000 of your IRA per person to purchase a first home and avoid paying the 10 percent early withdrawal penalty. If these same funds are pulled out of a 401(k) plan you could be subject to an additional federal tax of up to $1,000. Roll the funds to a traditional IRA first and save the tax. Contact our office at (518) 798-3330 if you have questions about tax penalties and your retirement plan.

FORM 5500 DUE DATE IS APPROACHING

August 1, 2016, is the deadline for filing Form 5500 for retirement or employee benefit plans on a calendar year. (The usual due date of July 31, 2016, is a Sunday.) There are two updates to be aware of. First, Form 5500 includes new compliance questions that plan sponsors can skip when completing the form. Second, if you're required to file at least 250 returns of any type with the IRS, including information returns (for example, Form W-2 and Form 1099), you may need to electronically file Form 5500-EZ for calendar year 2015.

BE AWARE OF THESE FOUR IRA RULES

If you have an individual retirement account, you're aware of how complicated the rules can get. Here are four to remember as you prepare your 2015 federal income tax return.

ARE YOU SAVING FOR RETIREMENT?

While retirement plan contribution limits have not increased for 2016, taking full advantage of allowable contributions and any amounts your employer matches is still a good idea. Contributions you make to employer-sponsored retirement plans reduce your taxable income because your employer deducts the amount you specify from your paycheck before taxes.

For 2016, you can contribute $18,000 to your 401(k), plus another $6,000 if you're celebrating your 50th or older birthday during 2016. You can save up to $12,500 in your SIMPLE account this year, plus another $3,000 if you're age 50 or over.

BALANCE RISK AND RETURN TO CREATE INVESTMENT BALANCE

Even if you're not an investment expert, you're probably familiar with the term "diversification." Choose the right mix of investments to keep a balance between risk and return.

DON’T MISS OUT ON THE "SAVER'S CREDIT"

If you're not sure what the "saver's credit" is, you're not alone. Members of the Senate Finance Committee believe many people who are eligible to claim the credit are unaware of its existence.

SAVE MORE FOR YOUR RETIREMENT

The amount you can contribute to your retirement plan increases in 2013. The 401(k) maximum salary deferral increases from the 2012 limit of $17,000 to $17,500. The catch-up limit for those 50 and older remains unchanged at $5,500. The maximum deferral for a SIMPLE increases from the 2012 limit of $11,500 to $12,000. The catch-up limit for 50 and older remains at $2,500. The 2013 maximum IRA contribution increases from the 2012 limit of $5,000 to $5,500. If you're 50 or older, your IRA contribution limit is $6,500.

HAVE YOU CONSIDERED A SIMPLE PLAN FOR YOUR BUSINESS?

Many sole proprietors and small business owners agree on the following two issues: they pay too much in taxes and they have difficulty attracting and retaining good employees. One way to address both of these issues is to set up a SIMPLE.

RETIREMENT TAX TIP

Consider a Roth IRA if you qualify for one. The beauty of a Roth is that your investment grows tax-free, and qualified withdrawals from a Roth will be completely tax-free. Contact our office at (518) 798-3330 for more information.

WHAT'S MORE IMPORTANT - SAVING FOR CHILDREN'S COLLEGE OR YOUR RETIREMENT?

A college education. Retirement. What do these major life events have in common?

One shared characteristic is that each comes with a price tag. Here's another: If you have school-age kids, you might be facing the challenge of having to decide which goal to save for. They're both important. So how do you make the choice?

LOOK INTO THE BENEFITS OF A SOLO 401(K) PLAN

Have you heard about solo 401(k) plans? The traditional type of 401(k) retirement plan is now available for self-employed individuals. And it lets you save more than other types of plans.